Forced to innovate thanks to the global financial crisis in 2012, Samsung found a solution that not only helped sustain its market presence, but also ultimately enter the world of startups and help its employees bring new creative business ideas on board. The solution emerged in the form of C-Lab (Creative Lab) that was kicked off as an in-house incubation programme back in December 2012. It was initially launched at the Samsung Digital City in Suwon, South Korea, though the company now has C-Lab facilities across the globe including India, Beijing, and Ukraine.
"In late 2012, when we were experiencing a sharp-turn in the global economic paradigm, we started to question ourselves that is the traditional model that we have sustainable for future growth," Hyunsoo Kim, Director, C-Lab at Samsung Electronics tells Gadgets 360 in an interview. "So we realised that the smaller innovative structures and corporate cultures were actually more fitted to the changing paradigm."
Unlike any traditional vertical and matrix organisational structures where companies need to follow a top-down management format, the C-Lab programme enables Samsung employees to form teams in a horizontal organisational structure where they can have minimal layers of management.
"Eighty percent of our Samsung Electronics' employees are in their 20s and 30s which means they are very young," states Kim. "We thus realised there was a generation change in our employees from the baby-boomer generation to the digital-native generation."
Employees don't need to have senior positions within Samsung to play significant roles in the C-Lab programme. What they need, as per Kim, is to have unique ideas that are creative enough to be transformed into a final project. The employees forming different teams under the C-Lab programme are called creative leaders. These creative leaders have autonomy in selecting their team members. Kim says that creative leaders could add new members to their teams without any special HR requirements.
"This was all started from the question of how can we really tap into the areas of interest for the digital-native generation," Kim tells Gadgets 360.
Kim says that any employee can pitch their ideas under the C-Lab programme 365 days of the year, and there are two rounds of project selection processes within a year. "We have a mosaic system through which people who are interested in their projects invest a cyber money to express their interests, and we have a final pitching day over here in the auditorium," the executive says. "We have an about 200-300 large employee audience that creates and assesses these projects, and the entire pitching day is broadcast in real-time to Samsung Electronics' employees across the globe and the top awarding projects are awarded and selected."
While a typical employee in a technology company needs to come to the office regularly, Kim says that Samsung employees working on a project under the C-Lab programme are free of time and location restrictions as the regular attendance system isn't applied to C-Lab members. However, creative leaders assign certain tasks and workloads that members need to follow, he adds.
The initial journey of the C-Lab programme was more to give a space to Samsung employees to bring new ideas and eventually adopt a creative corporate culture. But in 2015, the South Korean giant introduced a C-Lab spin-off policy that helped the participating employees launch their own startups after successfully completing their projects. The company currently supports the spin-off companies through seed money investment and business consulting and guarantees their independent management. Kim tells Gadgets 360 that the company retains approximately 20 percent share in the spun-off startups and provides them support in terms of PR and marketing, if required.
"Normally, if you work at a company, you are always evaluated at the end of each year and based on those evaluations, your salary is adjusted and that salary increases and is translated into points," says Kim. "Once we accumulate those points, they result in your promotion so on and so forth. However, at C-Lab, we completely do away with this sort of evaluation structure for the first year that you're at C-Lab because we want people to focus on developing their ideas — not focusing on getting any pay increase or promotions. What ultimately we want is good results. Thus, if a project shows good results, then we retrospectively apply salary increases and promotions."
The C-Lab programme offers a step-by-step process for participants to let them easily make their projects publicly available for the masses. Once an idea is pitched, the employees under the programme reach the stage of team building and mentoring that help them prototype their concept and then validate it. Samsung offers a C-Lab Fair and a Global Showcase platform under the concept validation stage that both help employees validate their concept through consumer feedback and furnish the final model. Importantly, the projects selected for the concept validation stage are showcased at various worldwide events and then move to the final, exit stage, if successful.
Samsung employees can give ideas on a variety of topics, including artificial intelligence, data intelligence, education, fintech, healthcare, Internet of Things, transportation, virtual reality and augmented reality, among others. Since the establishment of the C-Lab facility at the company's Digital City in Suwon back in December 2012, as many as 917 Samsung employees have participated in 228 projects that are essentially targeted at global audiences.
Some of the popular projects from the C-Lab programme include fitness-focused Swallaby and Salted Venture, healthcare-centred E2EHealth and Welt, and lifestyle-aimed Mangoslab and Linkflow, among various others. At CES 2018 in Las Vegas, Samsung unveiled three new projects, including S-Ray (Sound-Ray) that consists of three directional speakers, GoBreath breathing exercise app, and Relúmĭno that is designed to offer smart glasses to the partially sighted.
"There are over 280 million visually impaired people across the world, and 86 percent of the visually impaired people can detect light," explains Kim. "That means they aren't totally blind. That was the basis of the idea behind Relúmĭno."
While Relúmĭno was originally conceptualised to use a Gear VR headset to enable people with vision challenges see images clearer when they are reading a book or viewing an object, the team is currently working on bringing the experience to smart glasses. These glasses will come with an image sensor to capture visuals that will further be processed by a connected smartphone to give users a better view of their surroundings.
Earlier this year, the C-Lab programme also brought indoor smart garden solution Plantbox and mobile usage pattern storing app AppBee.
The company also gave birth to Indian startup Tag Plus that recently spun off from the C-Lab and became a distinct entity. Moreover, as many as 186 projects have been completed the programme so far, while 42 are ongoing and 34 have been spun off.
The C-Lab facility in Suwon is spread across 1,884.297 square metres and is located in the basement near the Central Park at the Samsung Digital City. It has a dedicated area called C-Lab Factory where participants are provided with hardware and software to easily work on their projects.
Samsung is in the process of expanding C-Lab by opening up the programme for outsiders in addition to its own employees. For external participants, the company is set to provide office space, cafeteria entry, and access to the C-Lab Factory for free at the Seoul R&D Centre. Outsiders' access to the programme is initially available in South Korea with the aim of engaging with and promoting Korean startups. Furthermore, the company is set to provide financial support of KRW 100 million (roughly Rs. 65 lakhs) to each startup participating in the programme.
In the next five years, Samsung plans to support a total of 500 startups where 200 startups are projected to be established by its employees and 300 will be driven by non-employees.
Disclosure: Samsung sponsored the correspondent's flights and hotel for a media tour to its headquarters in South Korea.